Tax Sales 101 Winnie Branton and John Kromer

Tax Sales 101 Winnie Branton and John Kromer Housing Alliance Monthly Land Bank Leader and Blight Series April 16, 2015

Land Bank Powers Land banks may acquire privately-owned, tax delinquent properties at tax sales. Photo credit: www. wkrg. com 68 Pa. C. S. A. § 2117(c)-(e).

Delinquent Property Tax Enforcement Pennsylvania has several statutes governing tax collection and enforcement. Most of PA governed by: Real Estate Tax Sale Law (RETSL) - governs in most of PA Municipal Claim and Tax Lien Law (MCTLL) – Philadelphia and Allegheny County, plus opt in

Tax Sale Process 1. Upset Sale 2. Private Sale 3. Judicial Sale 4. Repository List of Unsold Properties

Upset Sale Public sale to the highest bidder Minimum bid (or upset price) = tax liens plus costs of sale Purchaser at upset sale takes the property subject to all other liens and claims against the property – NO CLEAR TITLE

Private Sale After a property has been exposed but not sold at an Upset Sale (under RETSL) Purchaser through a private sale takes the property subject to all other liens and claims against the property – NO CLEAR TITLE Written bid subject to approval by all taxing districts; advertising and notice requirements

Judicial Sale Initiated by court petition Following notice to all interested parties, Court issues order directing the sale of the properties “free and clear” of all tax liens and municipal claims, private liens and mortgages, and other charges Public sale to the highest bidder Minimum bid = costs

Repository List of Unsold Properties not sold are maintained on the repository list May be sold without notice Subject to approval by all taxing districts

Acquisition at Upset Sale How can a land bank acquire property at an upset sale? Ø Prior agreement to buy if NO bid higher than minimum; or Ø Offer highest bid

Acquisition at Judicial Tax Sale How can a land bank acquire property at a judicial tax sale? Ø By negotiated agreement with tax claim bureau or other plaintiff/tax-foreclosing body Ø For negotiated sum or other consideration Ø No competitive bidding Ø Land bank takes property with “free and clear” title

Redemption and Challenges No post-sale redemption rights under RETSL Under MCTLL, for occupied properties, 9 -month post-sale redemption for vacant properties, no post-sale redemption Post-sale legal challenges based on failure to follow notice requirements; constitutional due process requirements